Soaring food and fuel prices drive UK inflation to 40 year high

UK inflation has risen above 10% for the first time in 40 years, and is only the fourth time in 70 years that inflation has breached 10%.

The office for National Statistics said the consumer prices index rose to 10.1% in July, hitting double figures earlier than expected. The reading exceeded the 9.8% forecast as the cost of food and drink rose at the highest rates since 2008.

The biggest increases came from bread and cereals, dairy, meat and vegetables. As a result, rising prices have reached record levels for restaurants, takeaways and hotels.

Households are expected to come under further pressure this autumn as energy bills are expected to continue to rise and push inflation above 13% and trigger a recession as people rein in spending.

Whilst energy prices have soared all over Europe, price in Britain eased last month from the record levels seen the month prior, although costs still remained significantly higher than last year.

Soaring food prices and rising energy bill will hit poorer families the hardest. James Smith, research director at the Resolution Foundation thinktank said:

"“It will take many months, and much more living standards pain, before inflation starts to ease. “So, the number one priority for the next prime minister will be to offer significant support to help millions of families through a brutal winter and beyond.”